MANILA and Washington are headed to Papua New Guinea for the Asia-Pacific Economic Cooperation (Apec) Summit with a crucial concern in mind: the future of their possible bilateral free trade agreement (FTA).
Trade Undersecretary Ceferino S. Rodolfo Jr. said the two camps are penciled to meet in November at the Apec Summit, which will be hosted by Papua New Guinea. He added time constraints are making it difficult for the Philippines and United States trade officials to meet, and the annual summit could be the best time to raise the possible FTA.
“Most likely, the next opportunity for them [Trade Secretary Ramon M. Lopez and United States Trade Representative Robert E. Lighthizer] to meet is in Papua New Guinea for the Apec Summit. They will most probably talk there,” Rodolfo, in a mix of English and Filipino, told reporters on Tuesday.
The Philippines and the US are determined to elevate their trade ties into an FTA, following the bilateral meeting between President Duterte and US President Donald J. Trump in 2017. If forged, it will only be the second bilateral trade deal of the Philippines—the first being with Japan.
“The most important step is the release of the joint statement on Tifa [Trade and Investment Framework Agreement]. That was already issued, so what we are waiting for right now is the opportunity for Secretary Lopez and the USTR to meet,” Rodolfo explained.
In a joint statement last Monday, Manila and Washington said they agreed “that enhanced bilateral engagement on trade under the Tifa should include work that yields benefits for agricultural producers, importers, exporters and consumers, and intend to work together in a number of areas.”
In particular, the two economies look to collaborate on the development of cold chain requirements and best practices in the Philippines, with international guidelines on food hygiene taken into account. The US has long been demanding the Philippines to do away with its two-tiered system in handling frozen and freshly slaughtered meat.
“This work will build on private sector and local efforts already under way in the Philippines to improve the existing cold chain. The United States agrees to make best efforts, subject to availability of US resources, to provide technical assistance to enhance cold chain development and management in the Philippines,” the joint statement read.
According to Rodolfo, Washington is now more permissive of Manila’s nontariff measures on farm goods, particularly on its meat handling regulations. “The good thing about the Tifa is that it gave them [US trade officials] the opportunity to understand our system better, why we need to keep that system,” he said.
“Of course, our system is different from theirs. We are a tropical country, that’s one, [and] we really have rules on how to handle fresh meat products,” the trade official added.
Now that they see eye to eye on disputed issues, Rodolfo argued the Philippines and the United States can move their economic relations a step higher—the finality of which must result into an FTA.
“We cannot preempt what they [Lopez and Lighthizer] will talk about. Hopefully, since according to the joint statement you have already resolved all the bilateral trade issues, we can now move on to the next level: How do you strengthen the relationship further?” he said.
The US is a major political, economic and defense partner of the Philippines. It has always been one of the country’s top export destinations and largest import origins.
In 2017 total trade between the two economies amounted to $17.4 billion, according to data from the Philippine Statistics Authority. The Philippines exported $9.66 billion of goods to the US that year, as against imports valued at $7.78 billion.
Top exports to the US were semiconductor devices ($743.97 million), digital monolithic integrated circuits ($691.77 million) and ignition wiring sets ($554.06 million). On the other hand, top agricultural exports were coconut oil ($553.33 million), pineapples ($132.7 million), raw cane sugar ($130.25 million) and desiccated coconut ($92.66 million).
Manila is also a beneficiary of the US Generalized System of Preferences (GSP), which allows it to export about 3,500 products to Washington at zero tariff.